key term - Economic nationalism

Definition

Economic nationalism is an economic policy that emphasizes the importance of domestic control over the economy, prioritizing national interests over global ones. It promotes protective measures, such as tariffs and subsidies, to shield local industries from foreign competition and foster national economic self-sufficiency. This approach often arises in response to perceived threats from globalization and aims to enhance a nation's economic independence.

5 Must Know Facts For Your Next Test

1. Economic nationalism gained traction during the 19th century as nations sought to protect their emerging industries from foreign competition and dependency.
2. One of the key principles of economic nationalism is the belief that a strong national economy is essential for political independence and stability.
3. Governments implementing economic nationalism often resort to protectionist measures like tariffs, which can lead to trade wars and retaliation from other countries.
4. In many cases, economic nationalism has been associated with political movements that advocate for stronger state control over resources and industries.
5. The rise of economic nationalism can also be linked to social unrest and dissatisfaction with the impacts of globalization, leading to calls for prioritizing local jobs and industries.

Review Questions

• How does economic nationalism relate to protective measures in international trade?
  • Economic nationalism is closely tied to protective measures like tariffs and subsidies, which aim to shield domestic industries from foreign competition. By implementing these protective strategies, governments seek to foster local production and reduce reliance on imports. This approach not only helps preserve jobs but also promotes a sense of national pride in local goods and services.
• What historical events or trends contributed to the rise of economic nationalism in the 19th century?
  • The rise of economic nationalism in the 19th century was influenced by industrialization, which created new domestic industries needing protection from established foreign competitors. The effects of colonialism also played a role as nations sought to assert their independence and control over their economies. Additionally, economic crises and wars prompted countries to adopt policies that favored local businesses and aimed at building self-sufficiency.
• Evaluate the potential consequences of economic nationalism on global trade dynamics in the modern world.
  • Economic nationalism can significantly alter global trade dynamics by encouraging countries to implement protectionist measures that disrupt traditional trade relationships. This shift may lead to trade wars, increased tariffs, and retaliatory actions, ultimately hindering international cooperation. While it may provide short-term benefits for some domestic industries, long-term reliance on such policies could stifle innovation, limit consumer choices, and create inefficiencies in global markets.

Related terms

Mercantilism:

An economic theory that advocates for government regulation of the economy to augment state power, primarily through accumulating wealth via trade surplus.

Protectionism:

A policy aimed at protecting domestic industries from foreign competition by imposing tariffs, quotas, and other trade barriers.

Trade Balance: The difference between a country's exports and imports, which is a key focus in economic nationalist policies aiming for a favorable balance.